Deals Review – July 2016

In partnership with the Business Desk, several of our experts will comment on significant deals every month. For July, corporate partner Jonathan Asquez takes a closer look at one of the stand-out deals, which was Capita’s purchase of York-based Trustmarque Solutions for £57 million.

The acquisition of Trustmarque from Liberata Group marks the third time in three years that the software reseller and services firm has been sold, and will see it integrated with Capita’s own technology reseller and service integration business.

A key attraction of Trustmarque was undoubtedly its notable public presence, with its near 1,500-strong client base including NHS Trusts, where the company’s medical record solutions software is utilised.

Trustmarque currently employs 620 people across offices in York, Coventry, Sheffield, Edinburgh and London and had net revenues of £191m in 2015.

According to Capita, it estimates Trustmarque will achieve a post-tax return on investment of around 15 per cent in 2018, and the deal fits with Capita’s proven strategy of acquiring partners that it knows well.

It has not all been plain sailing for Trustmarque. A turbulent 2014 resulted in private equity backer Dunedin, which backed a reported £43m buyout in 2013, losing confidence in Trustmarque’s business projections.

However, since being purchased by Liberata in September 2014 and subsequently integrated with sister business Trinity Expert Systems, Trustmarque has delivered some impressive results.

After a string of private equity backed transactions, it will be interesting to see how Capita integrates Trustmarque within its business.